Incentives: Used to encourage better contractor quality performance. They may be either positive, negative, or a combination of both. Incentives may also be monetary or non-monetary. Incentives do not need to be present in every performance-based contract as an additional fee structure. In a fi Us price contract, the incentives would be embodied in the pricing and the contractor could either maximize profit through effective performance, or have payments reduced because of failure to meet the performance standard.

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